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2013 (5) TMI 397 - KERALA HIGH COURTWhether bed sheet answers the description of "cloth" entitling the appellant for exemption. - appellant's case is that bed sheet made of powerloom cloth is essentially cloth as such and it is entitled to exemption under the specific entry provided under Item 10 of the Third Schedule to the KGST Act and along with that he prayed for waiver of interest. – Department submitted that lack of specific entry in the First Schedule providing for rate of tax on an item does not lead to exemption for the commodity because the residuary entry of the First Schedule specifically states that all those items which are not covered by specific entries would be subject to rate of tax at 8%. Held that - It may be noticed that various tariff entries referred to in Item No.11(i) of the Third Schedule does not take in the above HSN Code, which means that even under the Central Excise Tariff bed sheet is treated as a separate item different from cloth from which it is made. It is worth noticing that when exemption is granted to handloom cloth along with it even readymade garments made of handloom cloth are covered by the said exemption entry i.e. Item 27 of the Third Schedule. So much so, we are of the view that Entry 10 of the Third Schedule is not intended to cover any products made from cloth such as bed sheets, bed covers, towels, napkins etc. - In our view the learned Single Judge rightly held so. - Decided against the assessee. Waiver of Interest - held that:- Waiver will be granted until the date of the judgment of the learned Single Judge against the appellant. However, if payment is not made as above, the partial waiver of interest granted by us will stand automatically vacated and the respondents can proceed for recovery of entire arrears with interest till date of payment.
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